CU/Bank Differences Surface in San Francisco Fed Panel
It’s a friendly clash of ideas and ideology over business lending and credit union growth shaping up this month between an Idaho banker and two credit union CEOs on one of those Federal Reserve panels devoted to promoting grassroots input and harmony.
In this case, the venue is the Federal Reserve Bank of San Francisco and the confrontation focuses on a sideline debate within the Community Depository Institutions Advisory Council.
At issue is CU advocacy of new business lending powers and the tax exemption, pitting the panel chairman, John L. Evans of D.L. Evans Bank of Burley, against Ron Barrick, president/CEO of Advantis CU of Milwaukie, Ore., and Darin Moody, president/CEO of Utah First FCU of Salt Lake City. Barrick is also vice chairman of the San Francisco CDIAC.
“I appreciate the importance attached to member business lending by credit unions but I do think the issue is the level playing field and equitable taxation,” argued Evans, the head of the $927 million Idaho bank.
In press releases recounting the most recent Oct. 26 meeting of the Fed’s 11-member CDIAC panel, dominated by Western community banks, Moody pushes Congressional passage of a bill raising the MBL cap as a means to help communities in Western states which continue to undergo depressed economic conditions.
“Eliminating or at least lifting the credit union member business lending cap is a decisive, common sense action policy makers can take today, when it’s most needed, to create jobs and stimulate the economy,” said Moody.
Evans counters that CUs, including those in his own state, already “are getting stronger” and are formidable competitors and that giving CUs business loan powers is simply wrong without “a better taxing situation.”
The Idaho banker, citing expansion tactics of one of his Burley competitors, the $989 million Idaho Central CU, suggested that CU really ought to consider “opening a few branches in Utah” to counter an interstate move slated next month by the $4 billion Mountain America CU of West Jordan.
Marking its first entry into Idaho, the Utah CU said last week it intends to open two branches in a Pocatello suburb and in Idaho Falls.
The president/CEO of Idaho Central, Kent Oram, said he has no problem with Mountain America coming into his home state, adding “I welcome the competition.”
Oram, whose CU is headquartered in Pocatello but is planning to open a Burley branch in January, was not immediately available for comment on Evans’ suggestion.
Meanwhile, William Rissel, president/CEO of the $1 billion Fort Knox FCU in Radcliff, Ky. and a member of the CDIAC of the Federal Reserve Bank of St. Louis, said the exchange with bankers at the series of fall meetings of CDIACs remains productive despite an anti-CU tone that can surface.
“I always think it is desirable to mix credit union and bankers together,” Rissel said, adding, “my experience is that we find out we have more in common than most think.”